China Securities Regulatory Commission has released the Measures for the Supervision and Administration of Private‑Fund Raising for public consultation. The regulatory framework for private investment funds is improved across multiple dimensions including investor suitability, fundraising‑conduct standards, sales‑institution administration and risk prevention. The draft for comments revises identification criteria for individual qualified investors. The threshold for household financial assets is raised to RMB 5 million, meanwhile household net financial assets shall hit a minimum level of RMB 3 million. Matching requirements between high‑risk private‑fund products and investors’ risk‑bearing capacity are strengthened.
Previously several market‑risk incidents took place. A small number of institutions sold private‑fund products to ordinary investors lacking sufficient risk tolerance by means of share‑splitting and joint‑holding proxy‑investment, amplifying potential loss risks for the general public. The draft explicitly bans share‑splitting, proxy‑group‑investment and other practices that implicitly lower investment thresholds. Sales institutions are obliged to complete investor risk assessments and strictly implement rules matching product risk grades with client risk‑bearing capacity.
Besides, fundraising‑subject liabilities are clarified. Private‑fund managers shall either conduct fundraising by themselves or entrust qualified fund‑sales agencies for distribution. Unauthorised third‑party intermediaries are forbidden to promote and sell private funds. For online channels, clear boundaries are set for short‑video, livestream and social‑media‑group promotions. Inducing unqualified investors to participate via traffic‑oriented marketing is prohibited.
Industry analysts state that stricter rules do not aim to restrain private‑fund‑sector development. Instead, they screen out unqualified participants and mitigate mass‑investment risks. In the short run, the industry will bear costs for investor screening and sales‑process reconstruction. In the long‑term perspective, poor‑quality institutions will be phased out, guiding private funds back to their original positioning of serving high‑net‑worth individuals and institutional clients. Market observers will monitor the release date of official final documents, private‑fund‑issuance volume and enforcement statistics against illegal fundraising activities.
